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absolutist royal power that merchants partici-
pated in new industrial endeavours, especially
under the direction of Colbert, minister of
Louis XIV (hence the neologism, Colbertisme,
meaning state interventionism). The King
owned, or was the patron of, the celebrated
Manufactures Royales (Aubusson, Sèvres,
Gobelins, arsenals, shipyards).
It is not surprising, then, that despite the
influence of the liberal ideology of the Revo-
lution, interventionism reappeared in France
at the beginning of the twentieth century, when
a ‘technocratic’ ideology of ‘public service’
developed, according to which efficient and
publicly managed institutions had to be sub-
stituted for inefficient markets for the com-
mon good. The economic crisis of the 1920s
and 1930s reinforced these views, often sup-
ported by conservative segments of society.
From another angle, Socialists and Marxists
were also calling for the ‘collectivization’ of
means of production, or at least for their na-
tionalization. The ‘Popular Front’ govern-
ment, which came to power in 1936, con-
ducted the first nationalizations.
A large nationalized sector was created,
during the period September 1944 to May
1946, mostly by de Gaulle’s provisional gov-
ernment, either because previous private own-
ers had collaborated with the Nazis (Renault)
or because of the strategic importance of the
company for the reconstruction of France.
This affected energy utilities (Charbonnages
de France, EDF, GDF), transport companies
(there was a full nationalization of Air France
and SNCF), industrial firms (Renault,
SNECMA), the Banque de France and the four
main high-street banks (Société Générale,
Crédit Lyonnais, and two others later to merge
into the BNP) and most insurance companies.
The public sector continued to extend dur-
ing the ‘thirty glorious years’ of growth that
followed the war, either via the creation of new
concerns or via the grouping of smaller, ailing
private industrial companies into a larger pub-
lic firm (such as Aérospatiale). The public sec-
tor was used as the driving force for the rest
of the economy (especially for industrial rela-
tions) and was responsible for a very high pro-
portion of investments. The public and pri-
vate sectors were not always opposed: indeed,
numerous Sociétés d’Économie Mixte (half
private, half public) also developed during the
1960s, especially for local utilities.
The victory of the Left in the 1981 elec-
tions brought a new wave of nationalizations,
affecting most of the remaining private finan-
cial institutions such as Suez and Paribas in-
vestment banks, and the largest industrial
groups (such as Pechiney, Thomson, Rhône-
Poulenc, etc.). Private shareholders were com-
pensated at full market price. The strategy was
for the state to control strategic and monopo-
listic companies in order to influence invest-
ment strategies, create employment, improve
social relations and provide the private sector
with competitive examples.
The 1981 nationalizations had mixed re-
sults. The short-term impact was considerable:
‘in 1985, there were over 3,000 nationalized
commercial firms, with 1.86 million employ-
ees. In industry alone, nationalized companies
accounted for a fifth of employment, a third
of investment and exports, and nearly a quar-
ter of turnover. The balance sheet of
nationalizations had positive aspects. A
number of loss-making firms were restruc-
tured and reorganized after nationalization,
and from 1985–6 started to be profitable.
However, costs to the public purse were con-
siderable. Furthermore, the justifiability of the
programme was weakened when the Social-
ists changed economic strategy in 1983, em-
bracing the belief that the ‘discipline of mar-
ket forces’ had to be respected by public sec-
tor firms as well as private ones. Consequences
were immediate, with companies such as
Renault, previously a ‘social laboratory’, shed-
ding tens of thousands of employees in order
to improve competitiveness. The position of
nationalized firms was also weakened by the
European Community reinforcement of com-
petition and anti-monopolistic rule, and its
limiting of opportunities for state capital fund-
ing.
In this context, in 1986 the Chirac right-wing
government launched an initial wave of
privatizations, shedding its ‘Gaullist’ inheritance.
nationalization and privatization